It used to be that attending a public university all but guaranteed graduating with little to no debt. State governments funneled enough money into higher education that families could send their kids to a local school without worrying about taking out a second mortgage or private loans to pay their way.
Researchers found that the money public colleges collect in tuition surpassed the money they receive from state funding in 2012. Tuition accounted for 25 percent of school revenue, up from 17 percent in 2003. State funding, meanwhile, plummeted from 32 percent to 23 percent during the same period. That’s a far cry from the 1970s, when state governments supplied public colleges with nearly 75 percent of their funding, according to data from the Federal Reserve Bank of Cleveland.
Students are paying a bigger chunk of the bill just as more of them are going to public colleges. The number of students enrolled in public colleges rose by 20 percent from the 2002-2003 school year to 2011-2012, according to the report. Meanwhile, median state funding per student fell 24 percent, from $6,211 in fiscal year 2003 to $4,695 in fiscal year 2012.
Although states began reducing their contributions to higher education costs a decade ago, the GAO said the collapse of the financial markets in 2008 caused a precipitous decline. State budgets were rocked by the recession and legislatures responded by slashing higher education funding by 23 percent per student, according to the Center on Budget and Policy Priorities, a think tank.
Left in the lurch, universities raised tuition to make up for the funding shortfall. As a result, the sticker price at public colleges has increased an average 28 percent above the rate of inflation since the 2007-2008 school year, according to the budget think tank. The trouble is that federal grant aid and other free money has not kept pace with the cost of going to school.
Consider the federal Pell Grant program, which awards money that does not have to be repaid to students whose household incomes are typically $30,000 or less.The maximum Pell award covered 77 percent of the cost of attending a four-year public university in 1980, but that fell to 36 percent by 2011, according to the Education Trust. The estimated tuition after grant aid is deducted–the so-called average net tuition–climbed 19 percent by 2012, the GAO report said.
“These increases have contributed to the decline in college affordability as students and their families are bearing the cost of college as a larger portion of their total family budgets,” the GAO wrote.
It was easier for states to blame massive divestment in higher education on the recession. Now that the economy and state budgets are recovering, however, schools are less willing to accept that states can’t step up to keep costs down. And the showdown between state governments and public universities are coming to a head.
California became the setting for a disastrous game of chicken in November, when the president of the university system Janet Napolitano proposed raising tuition as a way to pressure Gov. Jerry Brown to provide more money to head off the increase. Brown refused to allocate more money from the state budget, and the University of California’s governing board voted in favor of the increase.
Coming out of the recession and the one in the early 2000s, state policymakers supplanted state dollars with tuition increases, according to the he Center on Budget and Policy Priorities. Forty-two states, nevertheless, have increased funding per student by an average $449 in the last year. Still, the average state is spending $2,026 less per student than before the recession.